Foreign investors continue to focus on London

According to a new report by KPMG, the country is receiving plenty of attention around the world at the moment. Indeed, capital city London was said to be attracting more foreign investment than any other destination.

This could be seen as a vote of confidence in the UK at a time when economic growth remains sluggish. Indeed, official figures showing that gross domestic product slumped by 0.2 per cent in the final quarter of 2011 raised concerns among some that Britain was about to experience a double-dip recession.

While the latest economic indicators suggest the UK will avoid this worst case scenario, a full scale recovery still appears to be some way off.

This means the continued interest in Britain – and London in particular – represents a boost for the country at a time when the government is trying to stimulate growth in the economy and tackle its budget deficit.

The interest in London is particularly significant given the fact that other countries around the world are enjoying much stronger rates of growth at the moment.

Indeed, much has been said about the emergence of markets such as Brazil, Russia, India and China in recent times.

The KPMG figures indicate that interest in these locations has gone up significantly in the last two years, with Sao Paulo for instance seeing foreign investment activity rise by 160 per cent during this period.

This is a major increase in anyone's book, which suggests emerging economies will continue to be tempting options for foreign investors in the future.

But the fact London continues to remain popular in the current economic climate shows it still offers an appealing environment, despite Britain's domestic financial woes and the knock-on effects of the eurozone debt crisis.